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At 66 years old, it would be fair to say that M.R. Rao has seen more business schools than most.
Having studied and taught at some of the world’s most established and revered institutions – NYU Stern, Rochester, Carnegie-Mellon and Cornell – the former dean of the Indian Institute of Management in Bangalore now faces his biggest challenge.
In 2004, he took on the role of dean of the Indian School of Business in Hyderabad, in central India, one of the newest business schools in the world and one that carries with it the hopes of Indian business and the aspirations of some of the world’s top business faculty.
Prof Rao’s decision to join ISB was straightforward. “The thing that really attracted me was that it was supported by a lot of people from industry, had the support of Kellogg and Wharton [see background] and had the potential to be a world class institution. I think we are the only institution in India that has that potential.”
But he is also pragmatic. “There is a lot to do,” he says.
His biggest problem is the same as that faced by every Indian business school worth its salt: a shortage of world-class faculty. Given that the school had no faculty at all when it started a decade ago, its list of 23 full-time faculty looks quite respectable. Prof Rao forecasts that the school should be able to attract a further five or six faculty a year in future.
Many of those will be more junior faculty, looking for tenure. So in an effort to attract the more senior faculty, Prof Rao has put in place a policy to enable them to visit Hyderabad from just one term to a full academic year to test the waters. He insists that the school wants top-class researchers as well teachers – professors at the IIMs are renowned as great teachers but not necessarily as researchers.
Because ISB can pay international salaries, it can compete for faculty on the world stage. But going global brings other challenges. While other Indian business schools cannot compete with ISB on salaries, other Asian business schools can. These days, Prof Rao says, the biggest competition for faculty is from schools in Singapore such as Insead, National University of Singapore, Singapore Management University and Nanyang Technical University.
“For people who want to come back [to India], Singapore is close enough and salaries are high,” he says. “Singapore is throwing in a lot of money.”
These days, about 30 per cent of classroom teaching at ISB is done by resident faculty, but the plan is for that percentage to rise to 50 or 60 per cent. The introduction of visiting faculty on the scale used at ISB was new to India, but Prof Rao does not think this is the only way that ISB has changed the business school scene in India.
In particular, he says, the ISB model of teaching a one-year, full-time programme to those with about five years of work experience – what Prof Rao calls the Insead model – was novel when it was introduced by ISB. (The flagship programme of the IIMs is a two-year pre-experience degree.) Now IIM Ahmedabad runs a similar one-year programme and IIM Calcutta is also launching one. “People are realising that education is a continuing process and can be used to change careers,” says Prof Rao.
He also believes the establishment of ISB has forced the Indian government to acknowledge that there needs to be more top-notch business schools in India – hence the plans to increase the number of IIMs from seven to 10.
While Prof Rao continues to strive for more top-notch faculty, top-notch students are less of a problem. Some 420 students enrolled on this year’s post-graduate programme – like the IIMs, ISB does not have the authority to award an MBA degree.
ISB students have an average GMAT score of 707 – on a par with, if not better than, all the top US business schools. Applications are rising by 30 per cent a year and this year Prof Rao expects 3,000 applicants for the coveted 420 places. In the 2009-10 academic year, ISB plans to increase the annual student intake to 560.
The school also plans to launch a doctoral programme. In the business school world, says Prof Rao, where a school can place its doctoral students is one of the big tests of its academic reputation. These days he says he finds it difficult to calculate how much of the school’s popularity is due to its association with Kellogg and Wharton.
The growing interest in India as a place to do business is undoubtedly affecting applications, with many Indian students enrolling at ISB after working for several years overseas. What has surprised the dean, however, is how few of them want to work overseas again once they have graduated. Many of them are turning down international jobs, he says.
“What I didn’t expect was that so many people wanted to work in India straight after graduation. But they all feel that this is where the action is.”
A school built from scratch
It was a little more than a decade ago that a handful of expatriate Indian business leaders and professors decided that the country needed a business school built on a different model, independent of the traditional Indian system.
Just as Insead was built in Fontainebleau in the 1960s and the China Europe International Business School was established in Shanghai in 1994, they concluded that with academic help from established US and European schools and financial help from business, they could build a school from scratch.
Faculty support came initially from the Kellogg school at Northwestern University, the Wharton school at the University of Pennsylvania and London Business School. To begin with not all went to plan. The idea was to build the school in India’s capital New Delhi, but local politics resulted in the school being established in Hyderabad. The foundation stone was laid in 1999 and the first student intake was in 2001.
Walking round the ISB campus is like walking round the Ceibs campus in Shanghai. Both have internationally designed buildings of the highest quality; both are on the outskirts of the city. With just a few hundred students on campus at any one time, however, what ISB lacks is the buzz of excitement felt at most US or European schools.
The executive student
After working for Cisco Systems for seven years in Silicon Valley, Sanjay Kuberkar decided it was time to return home to India. “I was keen on moving to Asia [not necessarily to India only] because of the rapid growth the region has enjoyed in the past few years, and the opportunities that growth presents to a professional,” he says. “These opportunities are not available in the US.”
He decided to use an MBA as a tool for returning to the Asian market and looked at programmes throughout Asia, including China. He decided on the PGPX (post-graduate programme for executives) at the Indian Institute of Management in Ahmedabad, a one-year post-experience degree similar to MBAs offered in Europe by IMD or Insead.
This year’s statistics for the PGPX programme show that Mr Kuberkar is not atypical of the class. The average age of the participants is more than 31 and although almost all are Indian nationals, more than 80 per cent have worked outside India and half of those had returned to India from overseas positions in order to join. Perhaps the most telling of the statistics is the average GMAT score of the class: 699, comparable with any of the world’s top MBA programmes.
Mr Kuberkar believes it will open doors. “After the programme, I hope to either start a new venture in the healthcare sector [the business plan for which is in the works], or join a venture capital firm,” he says. “This is quite a different plan from what I had decided when I entered PGPX, but PGPX has pushed me to think differently and think big, and at the same time helped me discover ... and appreciate my strengths.”
The IIM student
For Anuj Pradhan, the decision to turn down a place on one the US’s most reputable MBA programmes was easy to make. “I was certain that my future career would be in India and not abroad and, if one wants to work in India, there is no better place than the IIMs as a launch pad,” he says. “The IIMs, especially IIM Ahmedabad and IIM Bangalore offer me the same opportunities of international exposure and networking that a US business school could offer me, but at an affordable price.”
Mr Pradhan says if he had taken out the $130,000 worth of loans he would have needed to study in the US, he would have had to work in the country for several years on graduation in order to repay them. And working in the US was not on the agenda.
So Mr Pradhan, a mechanical engineer by training, has started his first year of study on the two-year post-graduate programme at the Indian Institute of Management in Bangalore.
Traditionally, those enrolling on the PGPs at the six IIMs have applied directly from their undergraduate degrees, although at Bangalore, that is beginning to change. These days just 40 per cent have no work experience, while 50 per cent have between six months and three years. Some 10 per cent have worked for more than three years on joining the programme.
On graduation, he hopes to move into management consultancy – and to stay in India.
“All the exciting new opportunities are in the emerging markets like India and China, which are the best places to grow as a professional today. So it doesn’t make sense to go abroad, especially in a field like consultancy,” he says.
The visiting student
Javier Rosales, a Venezuelan by nationality, had always wanted to visit India. For him, one of the advantages in enrolling on the MBA programme at Cambridge’s Judge Business School in the UK was that he could carry out an exchange programme with the Indian School of Business, in Hyderabad.
For one month this summer he studied on courses at the ISB in entrepreneurship, corporate finance and operations. A supply chain specialist by training, Mr Rosales used his time in India to complete his dissertation on the Indian auto industry.
While some of the classes were similar to those at the Judge, others were different. “The operations class was more focused on the technical part of the subject,” Mr Rosales says. “In our [Judge] MBA the technical part was in the book and professors said we could go and read it if we wanted to.”
There were other differences, too, such as the campus, he says. While the Judge is a compact campus in the heart of Cambridge, ISB is a sprawling campus on the outskirts of the city, which becomes a home from home for the students who live there.
Teaching styles varied, too. “In Europe it is more face-to-face,” he says. “In India it is more formal.”
Perhaps the biggest difference he noticed about the two experiences was the competitive rather than collaborative attitude of students in the ISB classroom. “The system [at ISB] drives people to be very competitive. Companies go to the school to recruit students from the top group, so there’s very high pressure ... In this environment it worked, though it was very tough.”